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ByteDance Splits US TikTok; Oracle, MGX Take Stake
28 Jan
Summary
- ByteDance's US TikTok entity now has non-Chinese ownership majority.
- Oracle secures security partner role, managing data and algorithm updates.
- MGX, an AI firm, gains influence over TikTok's future AI direction.
ByteDance, TikTok's parent company, has established a distinct American entity, "TikTok USDS Joint Venture LLC," to manage its U.S. operations. This strategic move aims to separate U.S. TikTok from its Chinese parent, addressing ongoing concerns regarding data privacy and foreign government influence.
This restructuring follows a 2024 law enacted by Congress, compelling the separation. Approximately 80% of the U.S. TikTok entity is now owned by non-Chinese investors, with ByteDance holding a 19.9% share. The venture licenses TikTok's recommendation algorithm from ByteDance and independently handles content moderation and data security.
The managing investor group comprises Oracle, Silver Lake, and MGX, each holding a 15% stake. Oracle, a cloud computing firm, acts as the security partner, overseeing data storage and algorithm updates. MGX, an AI-focused firm from the UAE, gains potential influence over TikTok's AI strategy.
Silver Lake, a prominent U.S. private equity firm, contributes financial and strategic expertise. These investors' involvement signals a new era for TikTok's U.S. operations, emphasizing compliance and independent management.
